The World Bank revised upward its forecast for Ukraine's growth in 2021 to 3.1% from its earlier forecast of 1.5% issued in October, according to the January 2021 World Bank's Global Economic Prospects, Interfax reported on January 6.

The World Bank also estimates a contraction of the Ukrainian economy this year of 5.5%.

The official forecast for growth is for a drop in Ukraine's GDP in 2020 of 4.8% at the end of the year and 4.6% of positive growth in 2021, according to the Ministry for Development of Economy, Trade and Agriculture of Ukraine.

The National Bank of Ukraine (NBU) had previously separately forecast the economy to decline by 6% last year, but towards 2020 it improved its estimates, to about 5%, predicting a recovery in 2021 of 4.2%. The updated macroeconomic forecast of the NBU will be announced on January 21.

Ukraine’s real GDP plunged 3.5% year on year in 3Q20 to UAH1,157bn ($41.9bn), improving from a 11.4% y/y plunge in 2Q20, the State Statistics Service reported on December 21, confirming its preliminary estimate. The economy grew 8.5% quarter on quarter seasonally adjusted (after dropping 9.7% q/q in 2Q20).

The economy was weighed down by a gross fixed investment plunge of 23.8% y/y in 3Q20 (vs. a 22.3% y/y drop in 2Q20). At the same time, private consumption inched up 1.0% y/y (vs. a 10.4% y/y plunge in 2Q20). In addition, public consumption advanced 8.2% y/y (vs. a 1.7% y/y drop in 2Q20). Real exports slid 7.2% y/y, while imports fell 10.1% y/y.

On the production side, the economy was mostly affected by falls in (1) agriculture of 11.1% y/y in 3Q20 (vs. a 29.1% y/y decline in 2Q20), (2) manufacturing of 5.6% (vs. 14.7 y/y drop in 2Q20) and (3) transportation of 8.4% y/y (vs. a 14.7% y/y drop in 2Q20). At the same time, construction picked up 8.2% y/y (vs. a 6.2% y/y decline in 2Q20), while trade advanced 9.7% y/y (vs. a 5.6% y/y drop in 3Q20).